Is AMR Finally Considering US Airways Tie-Up?

AMR Corp., the bankrupt parent of American Airlines and regional carrier American Eagle, has reportedly agreed to consider merger options with rivals, including US Airways Group (NYSE:LCC).

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A source familiar with the matter broke news of a potential tie-up on Friday. The airline has reached an agreement with its creditors to explore whether a merger would be its best option in moving forward, the source told Reuters. Spokesmen for AMR and US Airways did not respond to the news services’ requests for comment.

AMR has long held the stance that it will emerge from Chapter 11 the same way it entered, as a stand-alone carrier. US Airways expressed interest in a deal in the past, but AMR was not receptive, so the former began to court the latter’s creditors, including labor unions unhappy with AMR’s proposed cost cuts, which would surely mean large-scale job cuts.

Unions say the merger would create a stronger airline and save more jobs than AMR’s stand-alone plan. However, US Airways has yet to make an actual bid for AMR, as the latter has a court-granted right to reorganize without intrusion by outsiders, which extends to September.

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